Green Dot provides card payments and other financial services directly to consumers, as well as indirectly, through its BaaS channel servicing the customers and employees of other companies, including Apple and Amazon. The company reported profits dipped 7% in the first quarter to $36 million, as revenue rose 4% to $416.4 million, according to a news release.  

Green Dot’s first-quarter earnings were “a bit better than we’d expected due in part to cost management,” Unruh said during Thursday’s call. The company in January cut 5% of its workforce, a company spokesperson said. Green Dot had 1,200 employees as of December 2022, according to its annual filing with the Securities and Exchange Commission. 

Gresham expects the second and third quarters to be “the most challenging quarters for this year” when it comes to profit margin compression, due to customer losses last year, he said. He didn’t identify those clients, but one of them was likely ride share company Uber, with which Green Dot had a legal dispute.  

“The growth of one of our larger BaaS customers continues to power the top line while we faced headwinds on revenue and actives from the roll-off of two Baas partners,” Unruh said during the call. “However, this impact modestly outperformed our expectations as some of the deconversion activity did not happen as quickly as we’d expected.”

As it juggles customer changes, Green Dot also expects to go live with a new banking services client in the second quarter. The client, who executives did not identify, should accelerate that segment’s revenue growth in 2024, Gresham said. Green Dot plans to name that large corporate customer this summer, Gresham told the media outlet American Banker.

The company anticipates bringing on an additional banking services client in the latter half of the year, and potentially a third, Gresham told analysts during the call. 

In the first quarter, Green Dot also faced a 12% revenue drop in its consumer segment, which includes the company’s consumer checking accounts and prepaid cards, among other offerings. That revenue decline was driven in part by a non-renewal of a program in retail and the decline of accounts, Unruh said.

By Caitlin Mullen on May 8, 2023
Original link